Major update in China trade war as Donald Trump reveals details of a massive new deal

President Donald Trump has given a major update on the trade deal he has been trying to strike with China.

The US and China have been engaged in a tense trade war since the 78-year-old announced he was implementing 'Liberation Day' tariffs on the rest of the world towards the start of April - with the communist country having been hit the hardest by the levies.

After a back and forth of taxing imports coming from each opposing nation, a truce was struck in May in the form of a 90-day pause on tariffs.

The Republican announced how he and President Xi Jinping shared an hour-and-a-half phone call on Thursday (June 5) with the aim of reaching a trade agreement - just six days after Trump accused China of violating the truce.

Officials from both the US and China were tasked with meeting in London, England, to draw up a proposal both leaders would be happy with.

President Donald Trump has reported that the trade deal with Chinese President Xi Jinping is 'done' (BRENDAN SMIALOWSKI/AFP via Getty Images)

After two days of crunch talks in London, a deal in principal had been agreed by representatives of both nations and was passed over to Trump and Jinping to look over before giving it the thumbs up.

"We have reached a framework to implement the Geneva consensus and the call between the two presidents," US Commerce Secretary Howard Lutnick told reporters yesterday (via CNBC).

And it appears that Trump is a fan of it, and so too is Jinping.

"Our deal with China is done, subject to final approval with President Xi and me. Full magnets, and any necessary rare earths, will be supplied, up front, by China," he posted on Truth Social.

The US and China is moving toward a period of economic peace after Trump, pictured in 2017, reported that a trade deal had been agreed (Qilai Shen/Bloomberg via Getty Images)

"Likewise, we will provide to China what was agreed to, including Chinese students using our colleges and universities (which has always been good with me!).

"We are getting a total of 55 percent tariffs, China is getting 10 percent. Relationship is excellent! Thank you for your attention to this matter!"

However, according to Scott Kennedy, senior advisor and trustee chair in Chinese Business and Economics at the Center for Strategic and International Studies, the deal is primarily based off the countries' need for materials the other possesses.

China holds almost the entire world's supply of samarium - a rare earth material that is largely used in the military for fighter jets, missiles and other equipment.

Trump has claimed the relationship between the US and China is 'excellent' (Win McNamee/Getty Images)

Back in April, China halted exports on samarium, as well as other rare minerals, with exporters only able to send it out with a license from the Ministry of Commerce.

In return for these minerals, China will hope the POTUS will ease restrictions which sees American computer chip companies limited in what they can sell to businesses in China.

The aim of these restrictions, which former president Joe Biden introduced before the Trump administration tightened earlier this year, is to slow the communist country in its ambitions to develop artificial intelligence both for military and commercial purposes.

“This deal is taped together by the two sides’ leverage over each other, not common principles or shared interests,” Kennedy said to CNBC. "The chances for further stops and starts are quite high."